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Many consumers in the dark about credit card debt consequences

| May 1, 2015 | Credit Card Debt

With the Great Recession nearly a distant memory, many people have begun to recover from financial challenges and are braving credit cards and other loans again. It can be good for Eugene residents to borrow in some cases. In other cases, this can lead to renewed financial woes. Credit card debt is especially challenging and can be difficult to recover from.

Recent information from financial experts has revealed that many Americans are hurting themselves when it comes to their credit card borrowing. About three-fourths of consumers with credit cards pay interest of at least 15 percent. Most have average monthly minimum payments of $408 – an amount that many households are not able to afford, after essential bills have been added in.

Keeping a small credit card balance and making regular payments can be greatly beneficial to one’s credit rating. However, a large number of consumers make the mistake of maxing out their credit cards and not refinancing their high interest rates to find a better interest deal. They also tend to live beyond their means by purchasing things they cannot afford, instead of saving for the things they want and shopping modestly.

On the other hand, younger Americans seem to be spending smarter. Many of them use secured credit cards or stay away from credit cards altogether, and only make purchases in cash. One couple conquered their staggering debt by cutting their unnecessary expenses and working extra hours until the debt was paid off.

It is not always possible to work more than one job to repay debt, and some expenses can’t be reduced. There are other options such as bankruptcy that can help families get out from under the crushing burden of credit card debt.

Source: MainStreet, “Wake Up, America – You’re ‘Delusional’ Over Credit Card Debt,” Brian O’Connell, April 30, 2015

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The Law Office of Kim Covington is a debt relief agency, and I have helped families, individuals and small businesses, file for bankruptcy relief under the U.S. Bankruptcy Code, for over 19 years.